Clark County, state settle tax dispute

LAS VEGAS - Clark County and the state have reached a deal to settle a lawsuit over taxes diverted from the county to balance Nevada's budget three years ago.

The county that includes Las Vegas had sought to recoup $102.5 million and won't get all that money back, the Las Vegas Review-Journal reported.

Under the agreement, the state will provide $35 million to the county's $50 million airport connector project on the Las Vegas Beltway and will adjust its Medicaid funding formula so the county saves nearly $16 million through June 30.

"This was a difficult negotiation, but in the end I believe we reached an agreement that benefits the county, the state and ultimately our taxpayers," County Manager Don Burnette said in a statement. "The airport connector project is desperately needed and will benefit all residents of southern Nevada."

County commissioners are expected to take action on the deal next month.

The agreement ends a dispute that began in 2009, when the Legislature passed a bill that took money from the county to plug holes in the state budget. The county sued in June in an effort to get it back.

In September, a state panel approved a $7.2 million settlement with Washoe County over property taxes diverted from the county to balance the state budget the last two legislative sessions.

Washoe County officials originally demanded that the state return $21.5 million. That demand and the bigger amount sought by Clark County came after a Nevada Supreme Court ruling last year that said the state couldn't take $62 million from a southern Nevada sewer fund.

The ruling forced Gov. Brian Sandoval to rework his proposed budget in the waning days of the 2011 Legislature and led to an extension of taxes that otherwise would have expired in June of that year to fill a $620 million budget gap.

Afterward, the counties said the same legal arguments applied in their case and they demanded refunds.